Volkswagen begins European shut down

German automotive giant Volkswagen Group has begun to suspend production at its facilities in Italy, Portugal, Spain and Slovakia this week and making preparing to shut down the rest of its European factories in the face of the spread of coronavirus, its CEO has said.

The carmaker, which owns a host of brands including Audi, Bentley, Lamborghini, Porsche, Seat and Skoda, added that it would be impossible to give any realistic forecasts about the company's performance this year due to the ongoing uncertainty.

Volkswagen's works council came to the conclusion that keeping workers at a safe distance from one another in order to prevent contagion would be impossible and recommended suspending production from Friday onwards.

“Given the present significant deterioration in the sales situation and the heightened uncertainty regarding parts supplies to our plants, production is to be suspended in the near future at factories operated by group brands,” said Chief Executive Herbert Diess.

He said that before the end of the week, production will be suspended at the company's plants in Spain, in Setubal, Portugal, in the Slovakian capital Bratislava and at the Ducati and Lamborghini plants in Italy.

Most of its other plants, in Germany and other parts of Europe, will start preparations to suspend production, probably for two to three weeks.

“2020 will be a very difficult year. The corona pandemic presents us with unknown operational and financial challenges. At the same time, there are concerns about sustained economic impacts,” Diess added.

One month ago, Volkswagen predicted that vehicle deliveries in 2020 would be stable at 2019 levels and forecasted an operating return on sales of around 6.5% to 7.5%.

“The spread of coronavirus is currently impacting the global economy. It is uncertain how severely or for how long this will also affect the Volkswagen Group. Currently, it is almost impossible to make a reliable forecast,” said CFO Frank Witter.

As the company begins to shut down European production, some of its manufacturing in China has resumed, with the exception of the factories in Changsha and Urumqi.

The announcement by the German carmaker comes just a day after Fiat Chrysler suspended production at its plants in Europe.

Back to Homepage

Back to Transportation